Question

Dresser Company sells one product. This summarizes the accounting cycle for 2016 for Dresser Company.

1. Prepare the journal entries and post the journal entries to the T-accounts.

Journal Entries:

Dresser paid the interest due on the Bonds Payable on January 1.

Dresser paid $750 of salaries and wages, which includes the amount accrued as of December 31, 2015.

Dresser sold 4,000 units of inventory for $13.00 each.

Dresser purchased supplies on account for $1,200.

Dresser purchased 3,000 units of inventory for $1.70 each.

Dresser sold 2,800 units of inventory for $14.00 each to customers using their Dresser Company credit cards (i.e., on account). (Assume all of these sales are collected without interest. Do not record these collections at this time.)

Dresser wrote off as uncollectible the accounts of Barker Corporation ($3,200) and Elm Company ($2,500).

Dresser paid $6,800 on accounts payable.

Dresser collected $60,400 of accounts receivable.

Dresser paid the interest due on the Bonds Payable on July 1.

Dresser accepted the return of 800 units of inventory originally sold for $13.00 (journal entry 3 above). All units can be sold again and are returned to inventory at the cost when sold.

Dresser accepted a 1 year, 6%, note from Leon Company in payment of Leon’s $2,000 account balance. This transaction occurred on Sept. 1, with interest and principal receivable on Aug. 31, 2017.

Dresser purchased 1,500 units of inventory for $1.72 each.

Dresser collected $1,000 from Elm Company, part of the balance previously written off.

Dresser paid salaries and wages of $64,000.

Dresser paid $7,200 for insurance coverage from May 1, 2016 thru April 30, 2017.

Dresser sold 2,500 units of inventory for $15.00 each.

Dresser collected $38,500 from customers on account.

Dresser purchased 3,800 units of inventory for $1.75 each.

Dresser paid $5,500 on accounts payable.

Dresser returned 200 units of inventory that cost $1.75 each.

Dresser sold 600 units of inventory for $14.50 each as a cash sale.

Dresser paid $1,800 selling expenses and $2,650 administrative expenses.

Dresser declared and paid $4,000 in dividends to its stockholders.

Dresser accepted a $55,000, 6%, 3 year note receivable from a trusted customer for 3,000 units of inventory on October 1. The market rate of interest on Oct. 1 was 5%. Interest is received semiannually on April 1 and Oct. 1

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